Paper bags.--Labor requirements for filling and weighing 50-pound

 paper bags are 0.5633 man minutes per bag for filling and weighing simulta-

 neously (Method A) and 0.9251 man minutes for filling and weighing separately

 (Method B). These labor requirements result in production standards of 107

 bags per hour for Method A and 130 bags for two men working with Method B

 (Table 1). In this case, again, the closest comparisons are possible between

 three packing stations for Method B and four with Method A and the correspond-

 ing higher rates achieved with six and eight stations, respectively.


 Analysis of Costs

 Burlap bags.--Fixed and variable costs of labor and equipment for

filling and weighing 100- and 50-pound burlap bags by the two methods are

shown in Table 2. Variable costs for four stations in Method A are $4.18

at an output of 312 100-pound bags per hour or 1.34 cents per bag. The

corresponding cost per hundredweight for 50-pound bags is 1.94 cents. Total

fixed cost at this rate is $411. Similar figures are shown at the higher rate

of output for Method A. Fixed costs for Method B are lower than for Method A

but variable costs are higher.

 Total costs for the two methods given in Tables 3 and 4 show that

Method B has a cost advantage at the lower annual output levels, because of

low fixed costs. As volume is increased, however, Method A has lower costs

as its low variable costs offset the fixed cost disadvantage. For example,

at an annual output of 100,000 hundredweights, the difference in costs is

slightly less than $300 whether only 100-pound bags (Table 3) or a combination

of 50- and 100-pound bags are packed (Table 4). In each case, costs are equal